A lot of Norwegians bought their first home last year

Buying a homePhoto: Berit Keilen / NTB

The number of people in Norway who bought their first home last year was the highest since 2011. Low interest rates seem to have offset the corona consequences, according to a new report.

There has been a clear increase in home purchases in most places in the country, according to the report by the Norwegian Real Estate Association and Ambita.

“After the fall in interest rates, we have seen very good times for first-time buyers. As the interest rate effect decreases, the housing market will fall back to more normal conditions. We believe that the increase in first-time buyers will decrease in most regions,” CEO Carl O. Geving of the Norwegian Real Estate Association noted.

54,000 buyers

In total, there were 54,175 first-time buyers in 2020, an increase from 51,438 in 2019.

The third quarter of last year is the strongest in first-time purchases registered in the history of the statistics, and overall, one has to go back to 2011 to find a year with as many first-time buyers.

Very low interest rates after the corona outbreak provide strong incentives to buy rather than rent a home, the Norwegian Real Estate Association emphasized. 

That has triggered strong price growth, especially in the Oslo region. Now, however, the association sees signs that high house prices are becoming a challenge for first-time buyers in the capital.

“Young people lose in the capital”

According to Carl O. Geving, the decline in Oslo started a little earlier than expected, and it comes at the same time as a clear upswing of first-time buyers in the neighboring municipalities.

“This is reminiscent of the trend in 2016-2017, when many young people moved out of Oslo to neighboring municipalities with lower housing prices. 

“With high Oslo prices and a low supply of first-time homes, it is, unfortunately, likely that first-time buyers will once again lose ground in the capital,” he said.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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